Days after receiving the RBI nod for merging ING Vysya Bank with itself, Kotak Mahindra Bank (KMB) has integrated its corporate lending and investment banking verticals to serve large corporates, just like many Wall Street banks.
Days after receiving the RBI nod for merging ING Vysya Bank with itself, Kotak Mahindra Bank (KMB) has integrated its corporate lending and investment banking verticals to serve large corporates, just like many Wall Street banks. "We have the size now (post merger with ING Vysya) and think our large corporate clients can be served better by integrating the lending and the investment banking functions," TV Raghunath, who has just been appointed as the head of the specially created corporate and investment banking (CIB) vertical, told PTI. The Rs 15,000-crore merger, effective April 1, will make KMB the fourth largest private sector bank in the country.
Raghunath said the rationale behind the move is to have a single team which will be serving large corporate clients, rather than making corporate clients go to various teams within the same institution. In effect, this means KMB will act more like a wholesale banker to corporates offering a slew of services under one-roof. During the December quarter, KMB's asset book stood at Rs 86,058 crore, out of which corporate lending was Rs 25,933 crore, making it the largest subhead.
It can be noted that many Wall Street banks, which are mostly into investment and wholesale banking in the country, have similar organisational structures to leverage on strengths. KMB's investment banking vertical, including its equity and debt capital markets divisions, merger and acquisition functions and foreign currency loans, is one of the busiest in the industry. Raghunath said when it comes to lending, it has been staying off big transactions till now and has participated in a few syndications.
Also Read: ING Vysya Bk becomes Kotak Mahindra Bank; RBI okays merger
The new vertical will be like "a roof on an existing structure", he said, adding it will have select people in senior roles. Accordingly, Kotak investment banking's senior executive director Chetan Savla will be joining the CIB, while on the lending side, Anu Aggarwal, who has been with the bank for over 10 years and handles corporate lending, will also be part of the CIB, he said. When asked about the bonuses which i-bankers earn and if they can continue with the same in the new vertical, Raghunath hinted at life beyond bonuses, saying a group like Kotak helps someone grow beyond monetary factors.
ING Vysya Bank stock price
On April 01, 2015, ING Vysya Bank closed at Rs 976.65, up Rs 40.95, or 4.38 percent. The 52-week high of the share was Rs 1027.00 and the 52-week low was Rs 540.00.
The company's trailing 12-month (TTM) EPS was at Rs 31.70 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 30.81. The latest book value of the company is Rs 368.65 per share. At current value, the price-to-book value of the company is 2.65.
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